02523cam a22003017 4500001000700000003000500007005001700012008004100029100001800070245015900088260006600247490004200313500001400355520113800369530006101507538007201568538003601640690013101676690005401807690010301861700002201964700002101986700002002007710004202027830007702069856003802146856003702184w18034NBER20161209133537.0161209s2012 mau||||fs|||| 000 0 eng d1 aBond, Eric W.10aMisallocation and Productivity Effects of the Smoot-Hawley Tariffh[electronic resource] /cEric W. Bond, Mario J. Crucini, Tristan Potter, Joel Rodrigue. aCambridge, Mass.bNational Bureau of Economic Researchc2012.1 aNBER working paper seriesvno. w18034 aMay 2012.3 aUsing a newly created microeconomic archive of U.S. imports at the tariff-line level for 1930-33, we construct industry-level tariff wedges incorporating the input-output structure of U.S. economy and the heterogenous role of imports across sectors of the economy. We use these wedges to show that the average tariff rate of 46% in 1933 substantially understated the true impact of the Smoot-Hawley (SH) tariff structure, which we estimate to be equivalent to a uniform tariff rate of 70%. We use these wedges to calculate the impact of the Smoot Hawley tariffs on total factor productivity and welfare. In our benchmark parameterization, we find that tariff protection reduced TFP by 1.2% relative to free trade prior to the Smoot Hawley legislation. TFP fell by an additional 0.5% between 1930 and 1933 due to Smoot Hawley. We also conduct counterfactual policy exercises and examine the sensitivity of our results to changes in the elasticity of substitution and the import share. A doubling of the substitution elasticities yields a TFP decline of almost 5% relative to free trade, with an additional reduction due to SH of 0.4%. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aE6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook2Journal of Economic Literature class. 7aF1 - Trade2Journal of Economic Literature class. 7aF13 - Trade Policy • International Trade Organizations2Journal of Economic Literature class.1 aCrucini, Mario J.1 aPotter, Tristan.1 aRodrigue, Joel.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w18034.4 uhttp://www.nber.org/papers/w1803441uhttp://dx.doi.org/10.3386/w18034